Business Use % Vehicle Question

[Jenniferdawn]

We bought a new van in 2011 and are planning on using the actual vehicle expense method for taxes and to take advantage of the 100% bonus depreciation rule this year. One thing I'm not clear about though. The business use last year was 41%. Do I use that 41% for claiming the deduction for these 2011 taxes only and then come up with a new percent and recalculate each future year what the deduction is, or do I stick with the first years 41% for all 5 years of deductions?

[Jenniferdawn]

Actually, I'm more confused than I thought. I'll give you the numbers and you can help me figure this out.

My depreciation deduction for my van for 2011 is $1494.00. (37,352 (van cost) x .40 (business use) = 14,940 x .10 (first of 5 year straight line depreciation) = $1494.00) But the 100% depreciation rule says the deduction limit is raised by an additional $8000. Does that mean I add $8000 to the $1494 for my deduction? Or do I do 40% of the $8000?

Please anyone, I'm needing some help here.

[Michael]

I'm sure Tom will reply at some point. I placed some TAGS on the bottom left that may be helpful until then.

[TomCopeland]

Originally Posted by Jenniferdawn

Actually, I'm more confused than I thought. I'll give you the numbers and you can help me figure this out.

My depreciation deduction for my van for 2011 is $1494.00. (37,352 (van cost) x .40 (business use) = 14,940 x .10 (first of 5 year straight line depreciation) = $1494.00) But the 100% depreciation rule says the deduction limit is raised by an additional $8000. Does that mean I add $8000 to the $1494 for my deduction? Or do I do 40% of the $8000?

Please anyone, I'm needing some help here.

I'm on vacation til Sunday. I'll reply to your question late Sunday.

[Jenniferdawn]

Thanks Tom! I appreciate it. I'll look at the tags too, though I've already done some searching and read Tom's books thoroughly and I'm still a bit confused.

[TomCopeland]

If your van was purchased new -
$37,352 x 40% business use = $14,940
$14,940 x 10% = $1,494
+ $8,000 100% bonus rule = $9,494
Depreciation deduction for 2011: 9,494

[Jenniferdawn]

Awesome! Thanks so much Tom. I thought I was understanding that right, but it seemed too good to be true.

First time doing my own taxes and I am confused on this depreciation.

The vehicle cost $43679.00

Tax for 2008 depreciation $13977.00 100% business use
Tax for 2009 depreciation $2850.00 100% business use
Tax for 2010 depreciation $1775.00 100% business use

Not sure how to figure out the depreciation for 2011 at 90% use or do I have any left to use? Thanks for any help that I can get

Melissa

[TomCopeland]

Originally Posted by Unregistered

First time doing my own taxes and I am confused on this depreciation.

The vehicle cost $43679.00

Tax for 2008 depreciation $13977.00 100% business use
Tax for 2009 depreciation $2850.00 100% business use
Tax for 2010 depreciation $1775.00 100% business use

Not sure how to figure out the depreciation for 2011 at 90% use or do I have any left to use? Thanks for any help that I can get

Melissa

I can't figure out how these numbers were arrived at, so I can't tell you what you can depreciate in 2011. You need to ask the person who did this depreciation, or find a tax preparer to help you.

[Atroya]

Are there any deductions I can take for buying a used van that will be used partly for the daycare, partly for personal use?

[TomCopeland]

Originally Posted by Atroya

Are there any deductions I can take for buying a used van that will be used partly for the daycare, partly for personal use?

There is no difference in the rules when buying a new or used van. You can use the standard mileage rate or you can claim the business portion of the actual expenses of the van (including depreciation).